WeWork set to axe 4,000 staff

WeWork plans to axe 4,000 jobs in a turnaround proposal by its major shareholder SoftBank that includes a pullback in Asia.

Under the proposal, the company's payroll would be cut by almost 30%, of which around 1,000 employees were cleaners, janitors or people in similar roles, all roles that could be shifted by WeWork to an outsourcing company.

WeWork was also now looking to prioritise three markets — the US, Europe and Japan — and would pull back from Asia and much of Latin America.

SoftBank’s proposal followed its $9.5bn rescue plan that saw it take control of the co-working company.

The rescue - which included a $1.7bn pay-out to founder Adam Neumann - had saved the firm from having to file for bankruptcy.

Marcelo Claure, the SoftBank executive who had been named as the new executive chairman of the office space provider, told WeWork staff on Wednesday that the company would have to “right-size” its business to reach profitability and that would include job cuts.

“Yes, there will be lay-offs — I don’t know how many — and yes, we have to right-size the business to achieve positive free cash flow and profitability,” he wrote in a memo seen by the Financial Times.

Claure added: “But I will promise you that those that leave us will be treated with respect, dignity and fairness. And for those that stay, we will ensure everyone is aligned and shares in future value creation.”